A new report on consumer attitudes and behaviour has found that the rising cost of living is having a direct impact on everyday lifestyles.
67% of people are now more conscious of their finances than they used to be, according to the findings of a study by consumer research firm Mintel Ireland.
The report follows last week's figures from the Central Statistics Office, which showed a slowdown in consumer spending.
The volume of retail sales in March fell by 1.8% compared with February, the second monthly fall in a row.
February saw the first annual drop in sales for four years.
The report found that consumers are tightening their belts in key lifestyle areas such as entertainment and eating out.
64% of people said they plan to eat out less often while 42% are prepared to cut back on grocery bills.
60% said they would buy fewer clothes and jewellery. More than half would cancel DIY and home improvements and cut back on treats for the family.
But the report found that when times are tough most people will still find the money to go on a big summer holiday and short breaks.
Separately, European Central Bank President Jean Claude Trichet has warned that the world is experiencing an 'ongoing and very significant market correction'.
He advised policymakers to make price stability their top priority.
He said inflationary pressures were being added to by oil and food price hikes.
Mr Trichet said these are demanding and challenging times.